Multichoice, the largest pay TV operator in South Africa, is revamping its pay TV offer to fend off impending competition from StarTimes, the Chinese Media conglomerate that recently acquired competitor, TopTV. The package, called DStv Extra, is set to replace the DStv Select package and will be priced at R380 ($39.00) a month. That puts the new package between the DStv Compact package and the most expensive of all Multichoice packages, DStv Premium. DStv Extra will offer 86 channels, slightly higher than the 73 channels that DStv Compact is currently offering but considerably less than the 119 channels that DStv Premium does. Another differentiation between DStv Extra and DStv Premium is that the former will not offer any HD channels; however it will provide its subscribers who possess a DVR set-top box the capability to rent movies and TV series by utilising the DStv BoxOffice service.

Competition is also set to intensify in the South African market with five local companies submitting applications to the country's Independent Communications Authority (Icasa) for a license to provide commercial subscription broadcasting services. The companies Kagiso TV, Siyaya Free to Air, Mindset Media Enterprises, Close-T Broadcasting Network and Mobile TV made their presentations at the end of July, although the license awards are not expected until year end.

In another development, the commercial broadcaster e.tv has announced its plans to launch by October 2013 a new free satellite service called OpenView HD. The service will be operated by Platco Digital and plans to offer initially around 15 SD and HD channels. e.tv has inked a 15-year contract with satellite operator SES for the latter to provide two transponders to Platco Digital from the SES-5 satellite at 5° East.

Multichoice's launch of the new DStv Extra TV package is the second line-up change in just three months. Back in April, Multichoice launched DStv Family, replacing at that time the DStv Select package. Multichoice's strategy is to grow its subscriber base by enticing TV viewers that previously were watching only free TV to sign up to low-cost DStv packages. The latest move is undoubtedly stimulated by the renewed threat from TopTV.

OnDigital Media, the parent company of TopTV, was struggling financially when at the end of March 2013 the Chinese company StarTimes said it would acquire the majority of the shares and plan a massive overhaul. StarTimes has said it will pour millions of rand into the business for a re-vamp and want to offer pay TV services at half their current cost. Even before the Chinese takeover, TopTV packages were on average 30 per cent cheaper than the Multichoice equivalents. The medium-tier TopTV Varietypackages cost R198 ($20.20 or €15.30) while the Multichoice DStv Compactcosts R275 ($28.00 or €21.30). The DStv packages contain more channels (between 20 and 30) but someone who want to have access to all DStv's sports channels (the most premium content that Multichoice has the rights to broadcast) and also want to have access to HD content has no other option than to subscribe to the most expensive package, the DStv Premium, for R625 rands ($63.70 or €48.10).

The Multichoice-StarTimes battle is not restricted to South Africa. The two companies are actively pursuing their pay TV business in a large part of Sub-Saharan Africa. Multichoice has launched a pay DTT service, named GOtv, and is targeting subscribers outside its home-base country. The service was first launched in June 2011 in Lusaka, the capital of Zambia, and offers a bouquet of between 16 and 26 channels. The cost varies between R52 and R72 ($5.30 to $7.40) depending on the country. At the end of March 2013 the GOtv service had attracted 2.3m subscribers in eight Sub-Saharan African countries.

Meanwhile, StarTimes entered the African market in 2002 and got its first license as a pay TV operator in Rwanda in 2007. The Chinese company claims 2.5m subscribers at the beginning of June 2013 and is offering its pay TV services in 10 African countries.

The launch of a free satellite package with 15 SD & HD channels is an interesting development. Platco Digital, the company that will manage the OpenView HD service, is financially backed by e.tv's parent company. e.tv, one of the largest commercial broadcasters in South Africa, has not hidden its intentions to move into the pay TV business in the past and is planning to "test the waters" with the launch of OpenView HD service. e.tv is putting its bets behind a 'freemium' model, offering a basic tier of SD channels for free and then charging for a top-up package comprising more HD channels and some premium content. The service will be modelled on Germany's HD+ satellite service.

The upsurge in interest in South African pay TV has been spurred by the country's migration to digital terrestrial television. The digital transmission standard selected by the South African government, DVB-T2, allows for up to 22 SD channels to be carried by one single multiplex. Their plans suggest that, despite the Multichoice-StarTimes duopoly that seems to be established in the country, there will be space for an affordably priced DTT channels bouquet.